Organizational Sustainability Transformation through KPIs: A Model for Sustainability Change

The financial industry is argued to play a vital role in transforming our economies toward sustainability, yet little is known on how to achieve such a transformation. In an inductive, qualitative, single case study analysis of a sustainability leader in the financial services industry, we investigate how the introduction of sustainability key performance indicators transformed the organization. Thereby we contribute to the understudied topic of sustainability transformation in the insurance and investment industry and aim to provide a deeper understanding of how this industry’s indirect real-world impact can be effectively leveraged to benefit sustainability. Introducing consistent indicators for sustainability performance essentially helped to overcome the prevailing diffuse and symbolic image of sustainability in the financial industry through non-financial accounting and reporting. Thereby the organization shifted its sustainability strategy away from individual opinions and sustainability advocates toward legitimate and widely accepted performance indicators. Initially triggered by external regulatory pressure and societal norms, introducing reliable key performance indicators activated organizational awareness, initiated changes in corporate governance, and reinforced a pragmatic sustainability transformation that considered numerous stakeholders’ needs. Our derived model illustrates how firms initiating an organizational sustainability transformation can leverage sustainability key performance indicators to (1) activate and commit internal stakeholders, (2) transform governance structures, and (3) establish accountability of actions and in decision-making.